Note that emissions trading systems do not constitute a Pigovian tax because it entails the creation of a property right. Nonetheless, both taxes and tradable permits put a 9L0 509 price on emissions, and that price is equal to all parties involved. Therefore, emission reduction targets are met at minimum cost.
The intention of a carbon tax is environmental: to reduce emissions of carbon dioxide and thereby slow climate change. It can be implemented by taxing the burning of fossil fuels — coal, petroleum products such as gasoline and aviation fuel, and natural gas — in 9L0 402 proportion to their carbon content. Unlike other approaches such as carbon cap-and-trade systems, direct taxation has the benefit of being easily understood and can be popular with the public if the revenue from the tax is returned by reducing other taxes. Alternatively, it may be used to fund environmental projects
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